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UOB KAYHIAN |
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Manulife US REIT (MUST SP) Adding Another Strong Asset
Expanding in new sub-market MUST has added a first California property to its portfolio - the deal is accretive and should strengthen its overall AUM profile. Strong tenancies and favourable lease structures support stable income growth and DPU visibility. Our DDM-based TP rises slightly to USD1.05 (COE: 7.6%, LTG: 2.0%). Valuation is compelling with DPU yields of 6.6-6.9% for FY19-20E vs 4.2-5.9% for office S-REIT peers. Post-deal, we see DPU upside with low gearing of 36.6% supporting further acquisition opportunities, and potential re-rating from an index inclusion.
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Singapore Post (SPOST SP) No Sale Of US Businesses But Relieving Losses; Still A Mixed Bag
SPOST announced that there were no acceptable offers for its US e-commerce businesses and the units would file for bankruptcy relief instead. The costly investment has been a drag on the group and might offer some relief given the slightly earlierthan-expected removal. However, its postal segment is not out of the woods yet and we maintain HOLD with a target price of S$1.04. Entry price: S$0.90
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